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Risks of Misclassifying Exempt Workers (03/29/12)

The U.S. Department of Labor has estimated that nearly 70% of
employers are not in compliance with the Fair Labor Standards
Act. In 2010 alone, it set aside $25 million for an enforcement
crackdown, adding 350 FLSA investigators with the goal of seeking
out employers that commit wage and hour
offenses—particularly exemption misclassifications.

The goal of DOL’s efforts is to get employers to create
compliance action plans to address employment law compliance. DOL
is considered likely to propose a rule that will require covered
employers to notify workers of their exemption status and perform
a classification analysis on workers classified as exempt. To be
in compliance, employers covered by the Wage and Hour Division
need to develop written plans for identifying wage and hour
violations, create a process for implementing the plan, and test
the process for compliance.